One of the biggest problems that people face when presented with a new and exciting opportunity is analysis paralysis. This is the most common deterrent from taking action for the majority. On the other hand, there are people like me who have a different type of problem. Myself and people in my camp have the instant reaction to be all action no plan. Although this is aimed in the right direction, there are still some steps to consider before we are ready to take action on a new opportunity.
Ready fire aim
One of my business partners Gary and I have a joke about our personality types when it comes to making decisions. We are both optimistic and not as deeply analytical as we should be oftentimes when presented with a deal that we have the ability to purchase. In the past, we have jumped the gun on purchasing deals based on preliminary information and an emotional response to the situation. Real estate is a fast paced and high stakes game and it can be easy to get reactive and emotional quickly if you don’t check yourself. Undoubtedly, Gary and I have made some mistakes purchasing properties using this method and have paid the price on multiple occasions. Luckily, we ended up turning most of the situations into profitable endeavors, and fortunately in real estate, if your plan is long term, real estate has the ability to be pretty forgiving. Gary and I jokingly refer to our previous method of attack as the “ready fire aim” method. When you are trying to shoot a target, the first thing you should do to come as close to guaranteeing success as possible is to aim your sights at the target. Gary and I metaphorically fired at the targets before aiming our sights causing a dramatically lower probability of hitting our desired target. This resulted in unnecessary and silly mistakes we could have easily avoided by being just a little bit more informed before making our decisions.
Arm yourself with information before taking your shot
Before advancing on an opportunity, you should at least have a base understanding of what it is you’re being presented with. Lets take my previous deals with Gary for example. We have been presented many deals in markets that we have no knowledge of with only one path to a successful outcome and have taken our shot on those kinds of opportunities. Our chances of success on these are decreased dramatically due to the lack of other viable strategies to make money and our lack of knowledge of the market itself. These two factors caused us to learn on the fly, a valuable lesson that has helped me since analyzing markets and finding landing spots for places I feel comfortable investing in. It didn’t have to be like that and it probably shouldn’t have been. A better course of action would have been as follows:
- Pick a market or markets we are interested in buying in and learn about the different neighborhoods.
- Select at least a loose deal buying criteria so that we can execute our desired exit strategy.
- Analyze opportunities for multiple exit strategies to limit our downside in the event our investment didn’t go to plan.
These three simple steps are all the due diligence we probably should have done before making the leap to purchasing some of the investments we did. With our sights aimed at this criteria, our mistakes would have been limited and our workload would have decreased with in turn an increased upside. Sounds good doesn’t it? This is not analysis paralysis. This is an intelligent and high level approach to use when presented with an opportunity that will allow you to skim off the top and deeply analyze seemingly better opportunities to move forward with based on your predefined criteria.
Don’t fear mistakes
This is not foolproof. Mistakes will happen and that is perfectly okay. I love mistakes. They are the most powerful teachers. If mistakes are painful, we use that pain to learn, grow, and get better! The thing readying your sights and aiming at the target is going to do is limit the unnecessary and silly mistakes you could make along the way that could be avoided. You are fully responsible for the choices you make. If you choose to make a bad one, that is on you and you need to learn from it, no one else. This loose framework should weed out the garbage before it even becomes a thought you consider. If Gary and I had used this loose approach when making decisions about some of our investments in the past, we probably wouldn’t have moved on some of the things we did. Fortunately, we’ve learned a ton and found ways to get creative to turn our mistakes into profit, even if it did take a lot longer than expected and profit was turned in a different way than originally planned. You could avoid a lot of the mistakes I made. The reason why any author writes any piece of business nonfiction is so you can learn from their experiences and avoid making the same mistakes. This one thing is so simple that you have no excuse to not implement it and learn from the mistakes I’ve made. Remember, go out and take massive action! Mistakes are okay and necessary, but there is a simple way to avoid a large majority of silly ones by using the “ready, aim, fire” approach! Your time is valuable. Don’t waste it on mistakes you can avoid!